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CSU trustees plan for the worst

Facing $250 million in mid-year “trigger” cuts, trustees of the California State University system are scrambling to plan for a potentially massive budget shortfall.

Among the options: a triggered mid-year tuition increase, enrollment cutbacks, and salary reductions.

"These are all difficult challenges and choices that the CSU must consider to address our severe budget situation," said Robert Turnage, California State University assistant vice chancellor for budget.

The trigger cuts could yet be averted, should voters approve a Governor Jerry Brown backed tax package on the November ballot. That tax increase would raise income tax on earnings over $250,000 for five years, and increase sales and use taxes by ½ cent for four years.

But polling has shown Californians to be split on the new taxes. And with the fate of the measure uncertain, the CSU system must anticipate the worst – a trigger cut which would reduce state support to only 61 percent of its 2007-2008 high, down $1.2 billion in total.

Those cuts, combined with increasing mandatory costs such as health care, leave the CSU facing a $510 million budget gap. That’s despite a $593 million increase in tuition, up from $2,520 annually in 2006-2007 to $5,970 in 2012-2013.

“We are at the point where the use of one-time funds to address ongoing budget cuts is not sustainable,” said CSU Executive Vice Chancellor and Chief Financial Officer Benjamin Quillian. “It is not possible to continue to patch over budget holes. We need to take actions that reduce our costs going forward. That is the only way we will be able to serve students with the classes and support services that they need.”

One solution would see a further, triggered mid-year tuition increase, should the tax initiative fail. The increase would amount to about $150 per semester, or 5 percent. That would be coupled with a 2.5 percent reduction in employee pay and benefits.

The alternative wouldn’t raise tuition, but would instead slash enrollment by 6,000 students. The alternative would also cut 750 CSU employees, and reduce pay and benefits by 5.25 percent for those remaining.

Either option would likely come with reduced research and sabbatical time for faculty, a $1,000 nonresident tuition increase, and extra charges for students taking more than 16 units, repeating any class, or those who have earned more than five years of academic credit.

The CSU Board of Trustees is not expected to make a final decision on a budget contingency plan until September.